A recent decision by the U.S. Department of Education (ED) gives a huge lift to private companies that supply after-school tutoring and other supplemental education services (SES) for the nation’s schools–but it also could result in a disruption or loss of service for tens of thousands of students in the Chicago Public Schools (CPS) and other districts of similar status.

In a Dec. 8 letter to Illinois state officials, ED demanded that CPS, along with 10 other districts across the state, stop serving as their own providers of tutoring services to struggling students. The letter, which came from Undersecretary Eugene Hickok’s office, informed the districts they were in violation of the stipulations set forth under the federal No Child Left Behind Act (NCLB).

Despite demonstrated progress over the last several years, federal officials say the districts still fall short of meeting the standard for adequate yearly progress (AYP), a series of benchmarks used to determine how well schools are faring under the law. Until improvements are made, ED said, all 11 districts named in the letter must rely on tutoring solutions only from third-party service providers–or else they will lose federal funding for these NCLB-mandated services.

In an interview with eSchool News, Nina Rees, ED’s assistant secretary for innovation and improvement, said the law has always held that a school system labeled “in need of improvement” cannot serve as its own SES provider.

A district is considered “in need of improvement” if it fails to meet the accountability statutes proposed by the state for two consecutive years. Because each state submits its own plan, ED does not have a set formula for determining whether a district meets the federal standard.

If a school or a district is in need of improvement, it cannot be an SES provider, according to ED. But teachers within those schools can be, if they are hired by a state-approved provider.

Illinois state officials asked the agency for a federal exemption that would have enabled CPS and 10 other districts in need of improvement to provide such services themselves. The letter, Rees explained, was intended to inform state administrators that their request had been denied. “We can’t simply waive a regulation,” she said.

The news elicited outrage from CPS Chief Executive Officer Arne Duncan, who branded ED’s ruling “a slap in the face” and an “appalling disservice to the children of Chicago.” CPS, the nation’s third-largest school system, plans to challenge the ruling “through every possible means,” Duncan added.

In Chicago, district officials say the decision means federally mandated tutoring services will have to be halted for some 80,000 children, about 40,000 of whom are being tutored directly by CPS and another 40,000 of whom are being tutored by private vendors paid by the district.

“Some of those students chose to be in the CPS program, so now we have to start over, have parents reapply for services, and then reallocate the available tutoring services based on need,” said Duncan, who called the decision “ludicrous.”

If forced to go solely with private providers, the district estimates it will have enough money to purchase tutoring for just 24,000 students–a far cry from the near 80,000 who are receiving help today.

“The federal government has ensured that the cost of providing these tutoring services will skyrocket,” warned Duncan, who said the district saved a significant amount of money–and reached far more struggling students–by providing the required services on its own.

While CPS spends an average of $400 per child to tutor students itself, officials contend the cost jumps to nearly $1,500 per kid whenever a private SES provider enters the mix.

“If this is what the law calls for, then the law should be changed,” Duncan said, requesting that federal officials be more lenient in their enforcement of NCLB–especially in a district like Chicago, where more than 74 percent of students reportedly showed improvements in test scores last year.

In defense of ED’s ruling, Rees said CPS should have taken more time–and made sure it was in compliance–before deciding to tutor students itself. She also placed some of the blame on the state, saying state officials should have taken a more proactive approach in letting the district know where it stood under the law.

The SES provision of the law–and ED’s latest interpretation of how it must be implemented–has opened the door for a myriad of for-profit companies, many of whose services rely on sophisticated technology to deliver targeted instruction and track students progress, to cash in on millions of dollars in federal funding earmarked for low-income students. Under the law, every school that fails to meet AYP for three straight years must set aside a portion of its Title I funds to purchase tutoring services for eligible students.

Minnesota-based PLATO Learning is one of many educational service providers aggressively pursuing state approval for supplemental services in struggling schools.

Currently approved in more than 41 states, PLATO’s Supplemental Services Education Program is a face-to-face tutoring service staffed by highly qualified teachers and anchored in the company’s Achieve Now curriculum for both reading and math. Each program includes a mix of interactive software, school and home learning activities, teacher materials, and student assessment tools.

Like many of its competitors, PLATO also provides an online assessment tool that enables educators to track students’ progress during the program and record their success based on a battery of assignments and incremental testing measures.

PLATO’s tutoring program currently is offered at 13 schools in Chicago, providing services for 1,100 students across the district. Bernice Stafford, the company’s vice president of school strategies and evaluations, said the company has yet to hear whether Chicago plans to halt its services until the situation there is resolved. No matter how it shakes out, she said, PLATO is looking forward to building its relationship with the district.

Despite being a third-party provider, Stafford said, PLATO doesn’t view itself as an outsider looking to take financial advantage of an uncomfortable situation. Still, she knows the company has to earn peoples’ trust.

“When we go into a district as an SES provider, we’re not going in for the first time,” she pointed out. “You have to have a knowledge of the district … you have to know its needs.”

While any company can go into a district and begin recruiting customers, she said, the key is to listen to what stakeholders are saying and come up with a solution that is unique to the community. Only then, she said, will companies see results.

See these related links:

Chicago Public Schools

PLATO Learning Inc.

U.S. Department of Education